Creative Leadership

The Difference Between For-Profit and Non-Profit Leadership

One thing that’s critical in leading a non-profit organization is the understanding that business leadership is often quite different from non-profit leadership.  Jim Collins calls it the difference between “executive” and “legislative” leadership.  In a business – particularly a privately owned company – the chief executive drives the train.  He or she makes the decisions and, at least from an authoritative point of view, those decisions are
the bottom line.

But in most non-profits – particularly in a church or ministry setting, leadership involves building coalitions, assembling teams, and bi-lateral cooperation.  I grew up as a pastor’s son in a small church in Charlotte, North Carolina.  I watched from the front row as my father had to deal with the Elder board, church committees, deacons, and other influential members in order to make decisions happen.  He became an expert at building coalitions and “working the room.”

Today – particularly in independent churches and ministries, I often see more executive style leadership, and this isn’t necessarily a bad thing.  In a non-profit founded by a single person with a clear, unified vision, a board usually exists, but it’s often little more than an advisory group – especially when the ministry is built around the testimony or calling of a particular person.  Sometimes this happens when the organization begins as a small “mom and pop” ministry, and over the years grows into a national outreach.

There’s a couple of different viewpoints on the issue, and I do believe that a visionary leader of a church or ministry shouldn’t be held back by an obstinate board or disgruntled church members.  If he or she has been chosen for a leadership role, I’ll usually default to their decisions.  Especially when accountability measures are in place, I’m often comfortable giving them wider latitude in church or ministry leadership.

But I’ve also seen that latitude horribly abused by egotistical leaders, who live lives of moral compromise under the auspices of “prophetic vision.”  They get a bit too used to the power, prestige, and financial incentives of national ministry leadership, and use their position as ruler more than leader.  Some of course have caused great damage to the faith, through moral, financial, or leadership abuse.

The key is understanding that in most ministry situations, we can’t simply copy leadership from a business perspective.  When legislative leadership is required, we need to understand the difference and act accordingly.  Perhaps the greatest test of a leader is is understanding that difference.

Have you been in situations with leaders who didn’t know the difference?

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5 Comments

  1. Phil-

    These words are so true, and point out that for-profit business leaders would do well to engage the philosophy of many non-profit leaders. The critical component that so many of your words describe can be boiled down to two…team building. Any good leader hires the right people, shares the vision and then empowers his people to make that vision become a reality. Anything else is dictatorial egotism which God will never bless, in a for-profit or not-for-profit environment!

  2. Non profits that work have a for-profit mindset. They hire based on more than a shared passion for a vision — they value talent and skill. They pay a fair wage. They give people the tools they need to get the job done. They give employees an opportunity to grow and learn.

    We need to see more of that in the non profit world.

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